Regulatory classification

[Commentary] Minority-owned small businesses need two things to compete and thrive in an economy that is dominated more and more each year by global megafirms: a level playing field where everyone plays by the same rules of the road and stable and certain regulations that maximize their ability to invest and grow. This is true in the brick and mortar business world and even more so in the increasingly vital digital world, where a handful of dominant tech giants can use monopoly control over gateway services like search and social media and their ability to mine and exploit massive troughs of consumer data to choke off competition. That’s why the Federal Communications Commission’s plan to reform the internet regulations known as “net neutrality” is so important.

Americans deserve a permanent, stable and evenhanded net neutrality law that protects our data and fair competition online. That is something that can only be accomplished by Congress, where bipartisan support clearly exists to make net neutrality the law of the land. A law would put net neutrality beyond politics, eliminate the need to rely on legal contortions like Title II, and boost fair competition and equal opportunity everywhere online.

[Harry C. Alford is president and CEO of the National Black Chamber of Commerce.]

After House Commerce Committee Chairman Greg Walden (R-OR) announce that he had invited the CEOs of both Internet-based companies and broadband internet access service providers to a September hearing on network neutrality, the committee’s Democratic leadership wrote to him saying, “In your announcement of the hearing, you said the Chief Executive Officers from eight of the largest corporations in the world with a combined market capitalization of nearly $2.5 trillion had been invited to testify. Although you stated the hearing was an inquiry into the ‘internet ecosystem,’ you once again failed to recognize how important the internet is for consumers, small businesses, entrepreneurs, political organizers, public interest groups, and people looking for work. We therefore ask that you make sure that any hearing has sufficient witnesses to represent the diversity of real people who will be affected by the FCC’s efforts to roll back net neutrality,”

First, AT&T joined the Day of Action because we too support an open internet. We are and have always been against blocking, censorship and discriminatory throttling. We support transparency in internet practices. The activists were confounded. I’ll be honest, I don’t get the confusion.

AT&T has for years consistently supported the core tenets of an open internet in our advocacy, in our business practices and even in sworn testimony before Congress. But that didn’t matter. Far from embracing our support for internet freedom, the Fight for the Future crowd declared our support a deliberate effort to mislead the public, all because we share a common goal but do not embrace common means. FFF went as far as to mean-girl us by proclaiming that we couldn’t even sit at the open internet table. Is it ironic to pursue an agenda of openness through exclusionary tactics, or is it just me? If the Day of Action proved anything, it’s that there is broad consensus that the internet in America should always be a place for free expression of ideas and an open exchange of information free from censorship and blocking. The disagreement is really quite narrow.

The Federal Communications Commission is well on its way towards repealing its existing network neutrality rules, which ban internet service providers from blocking legal content, slowing down specific connections, or charging tolls for so-called "fast lanes" on the internet. But the "replace" half will fall to Congress. And that's going to be much harder.

Earlier in July Sen Ron Wyden (D-OR), a longtime net neutrality advocate, said that he would only support a net neutrality bill that provided the same level of consumer protection that the FCC's current regulations do. He also dismissed the idea that the Federal Trade Commission could enforce such rules. "This is not their beat, their beat is not communications," Sen Wyden said, echoing similar concerns from activists. Republicans could pass a bill without support from Democrats, but only if they can draft a bill that they all support. But just like replacing Obamacare, that's not as easy as it sounds.

A coming Congressional hearing on network neutrality has left the likes of Amazon, Facebook, Google and Netflix in a tough position: They can either subject their chief executives to a potential grilling — or sit it out and take plenty of political heat.

If they sit out the hearing, they might send a poor political signal — to supporters and opponents alike — at a time when the Trump administration is preparing to scrap the US government’s current net neutrality rules. For the moment, tech giants don’t have much to say about their plans. Amazon, Facebook, Google and Netflix declined to say if they would dispatch their chief executives to Congress. They have until July 31 to contact the committee about their participation. Republican lawmakers, meanwhile, haven’t yet heard from those companies, either. But the House Commerce Committee did offer an early warning: “It is our expectation that the invited individuals will attend. These CEOs are in a unique position to provide important perspectives on issues they have long been publicly vocal on,” said a spokesman for House Commerce Committee Chairman Greg Walden (R-OR).

Tech giants that decline to attend the hearing — or try to send a lower-level executive — could incur the wrath of federal lawmakers, who are known to blast companies that don’t testify. Then again, appearing before Congress could subject the likes of Amazon’s Bezos or Netflix’s Hastings to tough, unwelcome questions — on issues that might not have to do with net neutrality at all.

Sens Ron Johnson (R-WI) and Roy Blunt (R-MO) sharply rebuked Twitter following reports that the website briefly blocked its users from posting links to a blog post that criticized the US government’s network neutrality rules. Twitter previously had described the mishap as a glitch, but Sens Johnson and Blunt still penned a letter that slammed the company’s chief executive, Jack Dorsey, for an incident that appeared to lawmakers to be “an affront to free expression.”

The confusing saga began on July 12, the day that Twitter joined Facebook, Google and other tech giants for an online rally in defense of an open internet. But those who sought to share the company’s blog post could not do so on Twitter. For a time, the site marked the link as suspicious and blocked new tweets containing it. That immediately led to cries of censorship, given Twitter’s public participation in the day of action in support of net neutrality — and on the opposite side of the debate from AT&T. A Twitter spokesman at the time said the link was “erroneously caught in Twitter's anti-spam filters” and quickly remedied the mistake. But the fracas still managed to reach Capitol Hill, where Sens Johnson and Blunt on Tuesday described the incident in a letter to Dorsey as “disturbing.”

Rep Susan Brooks (R-IN) told a packed room of small and mid-sized cable operators here that the government should back away from burdensome internet regulation, and called on the crowd to help explain to consumers how the current rules could hurt. “We have to provide a framework that offers a guardrail,” said Rep Brooks, who sits on the Commerce Committee and represents most of northern Indianapolis. “But we can’t be so restrictive that we are impeding all the innovation and all the advances in technology.”

Part of the problem with building momentum for the changes is public support, and the fact that the true definition of “net neutrality” has been hijacked by some groups to fit their own point of view — and business strategy, Rep Brooks said. “We do believe in an open internet,” she said, “and we don’t believe in throttling or blocking customers’ signals for any reason." But, she said, “There is no subject more confused in the mind of the pubic than net neutrality.” “We need to figure out a way to talk about this differently,” she said, with more simplicity. “We get thousands of calls and letters on this issue. People do not understand.”

Recently, Verizon was caught and subsequently admitted to throttling all video traffic on its network. July 25, the company is finally addressing the potential network neutrality issue. Verizon said that its actions represented “reasonable network management,” which is an exception carved out under the 2015 net neutrality rules. "Video optimization is a non-discriminatory network management practice designed to ensure a high quality customer experience for all customers accessing the shared resources of our wireless network,” a spokesperson said.

It’s pretty expected that Verizon would argue this. It said last week that its video throttling was a matter of “network testing” that would be “completed shortly,” and speeds since appear to have returned to normal. The trouble is, the order is a little vague on what constitutes “reasonable network management,” since the commission assumed it might take many different forms. But it has a handful of guidelines of what might and might not violate the exception. One important limitation: the practice must be “primarily motivated by a technical network management justification rather than other business justifications.”

The House Commerce Committee’s Communications and Technology Subcommittee held a hearing on July 25, 2017. Lawmakers came to talk Federal Communications Commission oversight; they came to talk FCC oversight; but as with most telecommunications policy discussions these days, network neutrality grabbed the headlines.

Full Committee Chairman Greg Walden (R-OR) announced that he will hold a hearing on September 7 entitled “Ground Rules for the Internet Ecosystem.” He sent invitations to CEOs of leading tech companies -- including Facebook, Alphabet, Amazon, and Netflix -- and broadband providers -- including Comcast, Verizon, AT&T, and Charter Communications -- requesting they testify.

“A strong consensus is forming across party lines and across industries that it’s time for Congress to call a halt on the back-and-forth and set clear net neutrality ground rules for the internet,” said Chairman Walden. “In some form or another, we have been working for at least 20 years on the intertwined goals of incentivizing the huge investments needed to connect Americans, while keeping the internet open and protecting consumer privacy. With almost everyone in agreement about fundamental principles to prevent anti-competitive behavior such as throttling and blocking, I think we are closer than ever to achieving a lasting resolution. The time has come to get everyone to the table and get this figured out.”

In a letter requesting their appearance, Chairman Walden said the open internet rules put in place during the Obama administration — which subject broadband providers to utility-like regulation — “disrupted the longstanding regulatory balance that for years allowed the internet to grow and thrive.” He added, “With your help, I know we can craft a fair, predictable and sustainable solution that not only benefits edge providers and internet service providers, but also the billions of consumers worldwide that deserve a free and open internet.”

Chairman Walden is joined by his counterpart in the Senate, Commerce Committee Chairman John Thune, in a desire to adopt legislation that will end the net neutrality debate.

But these lawmakers so far have offered few specifics, and for the moment, they don’t have much Democratic support. Many in that party have rallied to save the FCC’s existing rules, preferring the Obama administration’s approach. Sen Cory Booker (D-NJ), for example, fears that any attempt to tackle net neutrality with Republicans in charge of the White House and Congress will result in rules that are too weak — and give broadband internet access service providers too much power to tamper with internet traffic.

In her opening remarks at the hearing, Subcommittee Chairman Marsha Blackburn (R-TN) bristled at the suggestion that Republicans are opposed to network neutrality. "Let me be clear. Republicans have always supported a free and open internet." We are trying to "restore the culture of humility lacking under the regulatory cloud left” by former-FCC Chairman Tom Wheeler. She said it was time to move past partisan rhetoric and pass legislation clarifying net neutrality oversight. Subcommittee Vice Chairman Rep. Leonard Lance (R-NJ) agreed and said there was common ground on the need for net neutrality and added that a light-touch approach has strong support.

Subcommittee Ranking Member Mike Doyle (D-PA) pointed to the over 12 million net neutrality comments in the FCC's public file as evidence that there was nothing wrong with the FCC's current net neutrality rules. He said the rules are working and to roll them back would hurt small business and "regular people." Rep Anna Eshoo (D-CA) agreed and said the FCC is barreling down the road toward eliminating critical protections and making it clear that start-ups and small business input is not as valued as special interests. “If the FCC moves ahead with its net neutrality plan the consequences will be severe,” said Rep. Frank Pallone (D-NJ), the ranking member of the full House Commerce Committee. “Their plan will have a chilling influence on our democracy, cut away at our connections with each other, and limit economic opportunities for the future.”

Morning Consult reports that the key takeaway from the hearing is that Democratic and Republican members of Congress both support net neutrality — they just have different definitions for the term.

Chairman Walden asked all the FCC commissioners if they support net neutrality. Chairman Pai said he favors “a free and open internet.” But Rep. Anna Eshoo (D-CA) took issue, telling him that his chairmanship “rests on the altar of dismantling net neutrality as we know it.”

“With all due respect to you, I don’t think it’s a credible statement to say that you support it,” she added.

FCC Commissioner Mignon Clyburn said that maintaining classification of broadband services under Title II of the Communications Act will ensure competition and drive greater service availability. “Taking away Title II for broadband undercuts our ability to ensure universal service for broadband by taking away our clearest source of authority to make sure all Americans are connected,” Commissioner Clyburn said. “Undoing our classification of broadband as a Title II service also harms the FCC’s ability to enable competition. There is specific authority in sections 224 and 253 of the Communications Act that allows the FCC to enable competitive access to monopoly infrastructure, and to remove other barriers to competition. Without Title II, it will be far more difficult for the Commission to enact policies to enable competition.” Commissioner Clyburn also pointed to how Title II helps to ensure privacy.

“We adopted rules of the road for broadband privacy last October and they were stripped away earlier this year with the passage of the Congressional Review Act (CRA) resolution of disapproval which means today, there are no comprehensive rules on the books protecting broadband consumer privacy for Americans,” Commissioner Clyburn said.

But FCC Commissioner Michael O'Rielly said “the term net neutrality means so many different things these days than it once did.”

GOP lawmakers presented themselves as advocates of the concept of net neutrality, while simultaneously targeting the 2015 Open Internet Order which reclassified broadband Internet access service as a Title II service. Chairman Blackburn, for example was drawing a distinction between supporting a rollback of the net neutrality protections and the idea that such a move would limit internet access for users, saying that “Republicans have always supported a free and open internet.” Republicans say net neutrality limits investment and growth of internet service providers, while advocates say a rollback of the Obama-era regulation would allow ISPs to throttle, block or slow connectivity. Their argument echoed one that has been used by ISPs like Comcast and Verizon.

“Everybody says they’re for an open internet,” said Rep. Peter Welch (D-VT). “The question I have is: Why change the existing regime where everyone agrees that there is an open internet?”

Past network neutrality, the hearing considered a discussion draft reflecting, among other things, the Commerce Committee’s ongoing efforts to improve the FCC’s process and transparency. Here’s some quick notes:

1. Chairman Pallone questioned Chairman Pai about decisions that have favored Sinclair Broadcast Group. He asked if the Trump Administration has tried to influence these actions. Chairman Pai answered that the White House has not contacted him about the proposed merger of Sinclair and Tribune or the FCC's decision to restore the UHF discount, which helped pave the way for that deal.
2. Commissioner Clyburn criticized FCC Chairman Ajit’s Pai decision to allow Sinclair to purchase of Bonten's seven stations. She told the subcommittee that she was kept in the dark about the bureau-level decision, which, she suggested, was hardly in keeping with Chairman Pai's promise for more transparency.
3. Chairman Pai warned the subcommittee that unless Congress authorizes more money, broadcasters will have to pay some portion of their post-incentive auction repack expenses. FCC Commissioner Michael O’Rielly testified that it may be a little early to declare the $1.75 billion post-auction repack fund insufficient.
4. Chairman Pai said that if the facts warrant and the law allows it, the FCC will be aggressive about freeing up TV band white spaces for rural broadband.

The groups behind the July 12 internet Day of Action have launched "Team Internet," the next phase of their protest against the proposed reversal of the Federal Communications Commission's common carrier (Title II) classification of internet access. Taking a page from the "distributed organization" model of Bernie Sanders' presidential campaign, the groups say that next phase will include speaking out at meetings and town halls and pressing local officeholders. The Day of Action was targeted to Washington—both the FCC and Congress—and that remains the focus, but through coordinated self-organizing that enlists "neighbors, colleagues, family and friends," to expand their protest footprint.Coordinating Team Internet is the pro-Title II team of Demand Progress, Fight for the Future and Free Press Action Fund. They are looking to tap into what they say was the nearly half a million participants in the Day of Action.